and that the traditional norm is six children per family. Suppose that each family would prefer some loss of parental satisfaction (e.g., have only three children) if old age support could be provided by a social security system, and that such a system can actually be set up if low fertility (three children per family) is universally adopted. A social improvement is possible if all families act in concert. However, once each family is assured that the others will have low fertility and that consequently the social security system will be set up, private satisfactions now will be maximized by not playing the game—to have both social security and full parental satisfaction, i.e., high fertility. Clearly, if each family is permitted to pursue its own interest, the traditional system will be a stable one. Only an enforced agreement among families, in other words government action involving coercion, can bring about a situation that was preferred to the old one by each and every individual family to begin with.*
A more difficult set of problems arises, however, when there are direct conflicts of interest with respect to fertility behavior, i.e., when one person's gain is another person's loss. A first layer of such possible conflicts of interest could be identified within the family itself. If the assumption that the family is a homogenous unit is discarded, there appear at least three potential types of negative externalities attached to high fertility: (a) those imposed on one of the spouses, usually though not always on the mother; (b) those falling on the adult members of the extended family; and (c) those falling on the children already born.
The underlying conflicts will not ordinarily be considered as justifying outside intervention; indeed, theoretically the family offers an ideal frame for dealing with externalities arising within itself because there is constant informal communication, comparison of satisfactions and interests, scope for endless bargaining, flexible compensatory schemes, mutual trust and affection, etc. By the same token the microcosmos of the family admirably illustrates the problems of correcting for externalities. The outcome of the bargaining and bribing process between the husband and wife, for instance, will be considered by an outside observer optimal for the couple only if he accepts the present distribution of power between the partners as desirable—a questionable assumption in the light of the strident feminist coloration of the family planning movement that apparently responded to an only too real need even in the economically advanced countries. Similarly the outcome of the bargain between the couple on the one hand and adult members of the extended family on the other hand (when such familial arrangement is relevant) suggests the possible difficulties in achieving an optimum solution in a political process when substantial interests of the minority—in this instance the couple who may derive prestige and power from their children but bear
*For a formulation of this generalized version of the famous "prisoners' dilemma" applied to optimum savings, see (23).